THE BIG PICTURE: As the annual convention of the Mortgage Bankers Association approaches the industry, once again finds itself at a crossroad. Just when it appeared that housing/mortgages had turned the corner, the “foreclosure-gate” scandal erupted, putting lenders and servicers back in the public eye. A lot is going on right now: refinancings are booming, loan brokers are hurting (but are not quite dead yet), the CFPB is up and running (sort of), and luckily profit margins on new originations are booming. And, of course, there's the “foreclosure story.” But here's something all mortgage bankers—regardless of your political affiliation—need to do now: Respect the government's role in the mortgage market and ask yourself this: Do you believe in the 30-year fixed rate mortgage? Without some type of federal backing of the mortgage market—be it Fannie Mae, Freddie Mac or something else, the 30-year FRM would not exist. That would be bad for business. Americans have grown to love the 30-year FRM for the simple fact that the principal and interest payment never changes. The only thing that will rise in regard to the monthly payment is the real estate taxes and the insurance premium which are both (usually) dwarfed by the P&I. Most foreign nations don't have a mortgage market where 30-year FRMs are readily available. Here's a prediction: If Fannie and Freddie are shot in the head and killed by Congress there will be no more 30-year FRMs ever originated again in the U.S. OK, maybe that's a gross exaggeration, but if the government-backed secondary market dies, the mortgage landscape could change radically, resulting in a longer recovery period for all. As one trade group official told me, "My members don't believe in socialism—except for when it comes to mortgages"…
And now for a word about the MBA and its annual convention in Atlanta. If you're serious about the industry you should attend the show later this month. Representatives from FHA, and Fannie and Freddie will be there along with regulators, key vendors and wholesalers. As I noted above—a lot is going on. You need to say informed…
As for the MBA itself, I could pile on, but I won't. On Thursday night the Daily Show with Jon Stewart poked fun at the trade group for engaging in a "strategic default" on its office building mortgage. The piece wasn't all that funny, but MBA's financial problems are ironic. A spokesman for MBA told me this past week the organization is back in the black on an operating basis. That's good news indeed, but one has to wonder: perhaps, it should've kept its new HQ and not fire-saled the thing. Recent press reports suggest the Washington office market is one of the healthier in the nation…
As for “foreclosure-gate,” if you need a list of the nation's top 100 servicers along with their late payments order the Quarterly Data Report. Just drop a line to
In Monday's National Mortgage News, Brian Collins explores why prepayment speeds might be jumping on GNMA MBS. Also, our analysis of foreclosure-gate and the nonperforming loan market. To subscribe to NMN call 800-221-1809…
WASHINGTON NEWS: Senate Banking Committee chairman Christopher Dodd, D-Conn., will hold a committee hearing Nov. 16 to review allegations of improper and fraudulent mortgage servicing and foreclosure processing by the nation's banking companies.
MUST ATTEND MEETINGS & CONFERENCE: If you have a vested interest in foreclosures you will want to attend SourceMedia's Best Practices in Short Sales and REO conference on Nov. 9 and 10 in San Diego. For more info visit this link:
DATA ANNOUNCEMENT: As we noted earlier, the new 2Q edition of the Quarterly Data Report is indeed out. The QDR provides industrywide composite data on loan production and servicing and specific figures on the top 100, including wholesale. A new feature for the QDR is our ranking of the nation's top FHA lenders. If you're looking for jumbo production numbers try the Alternative Products Quarterly Data Report. For more info on both drop an e-mail to
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THE LAST WORD: Go Phillies. Oct. 9 is John Lennon's birthday. He would've been 70.
